In the past merchants that accept payments on counterfeit credit cards would not bear the losses created through the use of these cards, that burden rested on the credit card companies. Recently the credit card processing world has started shifting to credit cards that use EMV technology to reduce the risk of counterfeit and fraudulent transactions. EMV is a technical standard for smart payment cards and for payment terminals and automated teller machines that can accept them. EMV capable cards and readers contain unique chip technology that will make counterfeiting credit cards much more difficult.
Starting on October 1st, merchants that have not upgraded their terminals to the new EMV technology will now be liable for losses incurred by accepting counterfeit cards for payment. This can be devastating to a small business owner that is expecting the cash from these credit card transactions to cover the costs of products and services used and can lead to lost profits. Losses incurred by merchants using the EMV technology from counterfeit cards will still be incurred by the credit card companies.
If you currently accept credit cards and have not upgraded your credit card terminals to be EMV compliant, consider weighing the costs of upgrading terminals in your organization against the risk of bearing the loss from a customer using a counterfeit credit card. Consider reaching out to your bank or credit card processor for more information about EMV and the shift of liabilities on 10/1/15.